Payroll Compliance in Australia: Key Changes in 2025

Key Changes in Payroll Compliance in Australia for 2024–2025

With the passage of the Fair Work Legislation Amendment Act 2024, which received Royal Assent on 26 February 2024, businesses across Australia must prepare for a series of significant reforms.

While some provisions have already commenced, several transformative measures will roll out over the next two years, each with important implications for payroll compliance in Australia.

Here are the critical dates and updates every employer should be aware of:

• 26 August 2024:
  • A new definition of casual employment takes effect, providing greater clarity on employment status.
  • The right to disconnect now applies to non-small business employers, reinforcing clear work-life boundaries and protecting employees’ personal time.
• 1 January 2025:
  • Wage theft becomes a criminal offence, marking a pivotal shift in enforcement and compliance expectations.
• 1 July 2025:
  • Superannuation contributions will be extended to cover employees receiving government-funded Parental Leave Pay, aligning with broader goals of retirement equity.
• 26 August 2025:
  • The right to disconnect is extended to small business employers, ensuring universal coverage across employer categories.
• 1 July 2026:
  • Employers will be required to pay superannuation entitlements concurrently with wages, moving away from the traditional quarterly payment model. This is expected to enhance retirement savings and improve transparency in contributions.

Closing Loopholes Legislation: What Employers Need to Know

The Closing Loopholes Act, rolled out in December 2023 and February 2024, introduces key reforms that directly impact payroll compliance across Australia. Key reforms include:

• Wage theft becomes a criminal offence from January 2025.
• Expanded protections against workplace discrimination.
• New definitions and rights for casual employees.
• Mandatory superannuation with wages from July 2026.

Understanding this timeline is essential for meeting evolving payroll legislation Australia standards and avoiding compliance risks.

New Casual Employment Rules

Effective 26 August 2024, major reforms to casual employment laws have reshaped how businesses classify and manage casual staff. Under the updated definition, an employee is considered casual only when there is no firm advance commitment to ongoing work.

Employers must evaluate factors such as the nature of the role, the predictability of future shifts, and whether the position mirrors part-time or full-time work key considerations for maintaining payroll compliance in Australia.

Conversion Rights and Employer Duties

Eligible casual employees can now request conversion to permanent employment after six months (or 12 months for small businesses). To stay compliant, employers must:

• Respond in writing within 21 days
• Provide legitimate reasons if declining the request
• Avoid any action that undermines conversion rights

Additionally, businesses must issue the Casual Employment Information Statement (CEIS) at appropriate intervals and maintain clear, up-to-date employment records, an essential component of any effective payroll compliance checklist in Australia.

The Right to Disconnect

With hybrid and remote work blurring the lines between work and personal life, Australia has introduced the Right to Disconnect, effective 26 August 2024 for non-small business employers. This reform allows employees to disengage from work-related communications outside regular hours, supporting mental health and work-life balance.

For employers, this change reinforces the need for clear boundaries, updated workplace policies, and accurate time tracking, key elements of effective payroll compliance in Australia.

Why It Matters

The Right to Disconnect protects employees from being expected to answer work-related emails or calls outside their regular working hours. Respecting this right is essential for wellbeing and is now a formal part of modern payroll and compliance responsibilities.

Employer Preparation: Adapting to the Right to Disconnect

To comply with the new legislation and support payroll compliance in Australia, employers should take proactive steps:

• Develop clear policies on after-hours communication
• Train managers and staff on setting healthy work boundaries
• Update employment contracts to include the Right to Disconnect

By embedding these practices, businesses not only meet payroll and compliance obligations but also build a culture grounded in respect, wellbeing, and trust.

The long-term benefits are clear: better mental health, reduced burnout, and stronger employee engagement. In contrast, ignoring these changes can lead to fatigue, poor focus, and declining productivity, challenges that affect both the bottom line and overall workforce resilience.

Prioritising this reform is not just about legal compliance; it’s a strategic step toward a more balanced, productive future for the Australian workforce.